Suppose Tex stock has a volatility of 44%, and Mex stock has a volatility of 22%. If

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Suppose Tex stock has a volatility of 44%, and Mex stock has a volatility of 22%. If Tex and Mex are uncorrelated,

a. What portfolio of the two stocks has the same volatility as Mex alone?

b. What portfolio of the two stocks has the smallest possible volatility?

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Corporate Finance The Core

ISBN: 9781292158334

4th Global Edition

Authors: Jonathan Berk, Peter DeMarzo

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